Drone Law Enacted as Part of North Carolina Budget Bill

On Saturday, August 2, the North Carolina General Assembly gave final approval to the Appropriations Act of 2014. The 260-page budget bill—which is now on the Governor’s desk—contains several pages governing the use and operation of unmanned aircraft systems (“UAS,” but known in common parlance as “drones”). The UAS provisions are similar to ones that were unanimously passed on June 25, 2014, by the North Carolina House, in the HB 1099.

Assuming the budget bill becomes law , what does its passage mean for North Carolina—which, by the way, should be aspiring to be “ascendant in UAS”—and for companies associated with, or in the production stream of, UAS? After all, the FAA appears to be far from achieving lift-off in its Congressionally-mandated UAS rulemaking proceeding: The U.S. Department of Transportation’s Office of the Inspector General recently observed in its June 26, 2014, Audit Report that the FAA “is behind schedule on most of the act’s [FAA Modernization and Reform Act of 2012’s] UAS provisions, and the magnitude of unresolved safety and privacy issues will prevent FAA from meeting Congress’ September 2015 deadline for UAS integration.” (It has been reported that President Obama may use an Executive Order to assign responsibility for generating UAS privacy regulations to the National Telecommunications and Information Administration (NTIA)—perhaps that would help bring resolution to the “unresolved privacy issues” referenced in the Audit Report.) And, while North Carolina was not selected by the FAA as a UAS test site, the North Carolina NextGen Air Transportation Center has obtained Certificates of Authorization (COA) to fly UAS in Hyde County, Butner, and elsewhere. So, again, with the FAA apparently stalled, and with NGAT operations taking off, what are the implications of the UAS provisions in the budget bill? It is difficult to say with certainty, but here are a few thoughts.

First and foremost, it means that the North Carolina General Assembly is paying attention. This is a good thing. To have the General Assembly engaged on this issue means that there are legislators who care about the technology and its economic potential and that there are commercial and governmental entities that are engaged and, in turn are engaging, legislators on the issue. This is important because NGAT cannot carry all the water alone to make North Carolina “Ascendant in UAS.”

Second, the General Assembly has recognized the continuing importance of privacy in a world where flying robots with cameras may soon become the norm. For example, the bill largely curtails the ability of people and entities—public and private alike—to conduct surveillance of people, their homes, and private property. (The legislation does not specifically define “conduct surveillance,” but judges and juries—not to mention cartoonists—are capable of working that out on a case-by-case basis.)

Third, the legislation shows the General Assembly’s astute recognition of the need to balanceindividual privacy with the critical function news gathering plays in our free, democratic society. Specifically, the legislation includes a provision exempting “newsgathering, newsworthy events, [and] events [and] places to which the general public is invited” from the general prohibition on “conducting surveillance.” Of course, the FAA’s current stance remains that it is illegal for journalists and newsgathering organizations to use UAS for newsgathering purposes (a position challenged earlier this year by several news organizations), but kudos to the North Carolina General Assembly for putting a high value on a free press and recognizing the importance of technological developments to the continued ability of newsgatherers to perform their critical societal function.

Fourth, the legislation restricts the ability of citizens to use UAS “to fish or to hunt.” Since the UAS provisions in the budget bill also make it a Class E felony “for any person to possess or use an unmanned aircraft or unmanned aircraft system that has a weapon attached,” the hunting limitation is reasonable, internally consistent, and, frankly, much appreciated. Although at least one commentator has suggested that the ban on hunting and fishing with UAS may be overly-restrictive because it may bar “using images from a small drone to help determine where to hunt or fish,” a close reading of the relevant provisions reveals that the bill only outlaws the use of UAS “to take” fish and wildlife and does not—at least not by its plain language—necessarily prohibit the use of UAS to find, track, or locate fish or wildlife for the purpose of engaging in non-UAS fishing or hunting. (CAVEAT: This is not a formal legal opinion about the scope of these provisions in the law!)

Finally, it cannot be ignored that the legislation contains the structure for the North Carolina Department of Transportation to establish a state licensing regime for UAS operators. It is admittedly difficult to argue with the wisdom of licensing commercial UAS operators. Nonetheless, the licensing provisions may have unintended consequences: the uncertainty they create may be viewed unfavorably by UAS stakeholders that might otherwise be interested in bringing business to North Carolina, the rightful epicenter of the UAS industry. While the potential federal preemption arguments would make for a fascinating discussion, any preemption discussion is premature, since we do not yet know what the FAA is going to do in this area. To be sure, the safety issues posed by commercial UAS operations are not to be taken lightly, and the General Assembly is to be commended for its foresight in that regard. On the other hand, as pointed out in the June 26, 2014, Audit Report, the FAA itself is struggling with how to safely incorporate small UAS into the national airspace—this may be an area better left to uniform, federal policy.

All UAS stakeholders that would like to see North Carolina ascend in UAS should be watching . . . I know my high school senior, for one, is . . . .

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